Pride and Prejudice

Many of you having been following my blog Credit Chaos since the beginning. I always write about compelling issues surrounding credit recovery, credit repair, finance for individuals and families and even home ownership. In the next series of blog posts, I will share an interesting subject and its relationship to better money management. I will discuss and comment on how "Pride" and "Prejudice" impacts the minds of consumers, the lending community, and even blinds voting trends when it comes to money. This may seem sensitive and it IS on every level because when a person is faced with a mounting and growing debt load and cannot decide to correct a problem that is starting them in face, pride is often the culprit. Stay connected for the next few days. I hope you are staying cool. In my neck of the woods its 110 degrees today!

Have an amazing weekend!

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How to Raise Your Credit Score Beginning Today!

A credit score is the single most important part of your financial profile. This is because a credit score will determine whether lending institutions and/or banks will approve you to borrow money or not. This becomes especially important to people who would want to borrow money to build a business. With a bad credit score, it is virtually impossible to acquire a loan for a business if your personal credit history is a factor in the decision.

On a larger scale, a credit score is the result of your whole credit history. It is determined by the way you handle your banking relationships, your credit relationships and all financial business involving some type of payment arrangement.
Do you pay them early and regularly? Have you had a lot of bad and late payments? Do you have a lot of credit cards and have big debts in all of them.

These will all determine just how high or low your credit score will be and whether you like it or not, these things are being recorded and filed by credit bureaus and credit reference agencies such as Equifax, TRansUnion and Experian. These three agencies are in charge of keeping tabs and recording credit histories of people.

In fact, in the USA, Americans are given a free credit report every year by these three agencies. However, credit scores are not part of it. If people want to know their credit score, they have to purchase the information via the internet through these three agencies’ websites.

If you do have a bad credit score, do not fret because it is not yet the end of the world. Actually, credit scores may be improved if you have the drive to do it. Here are some of the factors that may affect the credit score.

1. pay your bills on time

One of the factors that affect a credit score is the way you pay your bills. People who pay their bills on time are seen as more responsible, trustworthier, better at financial transactions and are more able to handle their money. Thus, they are good candidates for business loans and credit loans.

2. Credit card handling

The way you handle your credit card and your spending habits will also affect your overall score. People who have maxed their credit cards and have not yet paid their bills will most certainly have low credit scores. This is because people who spend more than they should are not good candidates for a loan because they may just waste the money away.

3. Having credit and a good one

People who have had loans in the past have better chances of getting a higher credit score than people who are just new in the game. However, these people should have also exhibited good credit history; otherwise, they will also have low credit score.

4. Applying for new credits

People who have applied for new credits in a period of time will have a lower credit score than someone who have applied just once. This is because, people who have applied in a lot of banks are seen as desperate for financial support and may be a riskier subject than other people.

Also, some banks consider people who have applied in different financial institutions for a loan dubious and suspicious. The consider such actions as "shopping" and it is very much frowned upon.

Be good to yourself, be good to your commitments and everything you desire will fall into place!

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A Good Credit Score - Is it possible Still?

What is a credit score really? Most of us have come to know it as the three digit number that tells creditor whether you can handle a loan at a high or low interest rate and repay it. If your credit score(s) is very low, there is also a possibility that your application will be denied and you won't get access to building credit.
It is quite a drag when you really want to feel like you are a part of society and not feel left out. The only way that won't happen to you is if you are able to reflect existing good payment history.

A good credit score as experts have put it should be 700 or higher. It is not unrealistic to achieve as 60% of the population is able to do it. The only thing you have to do is pay your bills on time which includes credits cards and other loans that you have had in the past. Doing so will avoid incurring any penalties that will be reflected in your credit report.

But how come some people are not able to get a good credit score and other's struggle with getting any credit at all? It is perhaps because they are unable to pay the money back and many of them continue to accumulate more debt putting their ability to pay any loans in question. This happens due to their uncontrollable urge to shop and the interest that grows or something that keeps them caught up in a cycle of bad credit history.

Some people are able to pay for it but it is now considered as a late payment. Those who ignore calls or mails from the bank will be dubbed as “unpaid.” This information is posted on your credit report so that lenders which you might approach in the future will already be careful.

To obtain a good credit score, you have to pay your debts and there is no simple way to put it. Cutting down on your expenses, working overtime, getting a second job and selling some stuff can help but it is not enough. This is why people are encouraged to talk with their creditors so an arrangement can be made that will hopefully prevent this from ever being reported.

Another solution will be to borrowing money from friends and relatives. Some people will help while others won’t. The only benefit from this is that they won’t charge you any interest. You will still have to pay them otherwise you will lose the only people you can turn to if you have a problem.

You could have gotten a good credit score only if you were able to monitor your expenses. One advice that a lot of experts say is that if you have a credit card, you should only use up about 25% of the limit. To avoid interest, make sure that you pay the whole amount and not just the minimum.

If you have done well and the bank wants to increase your credit, let them just be sure to stick to the strategy.

Errors on the part of the creditor may have also prevented you from getting a good credit score. So, review your credit report and see if everything there is accurate. If there are mistakes, report it and show proof with the proper documents. Your credit score should improve afterwards should the investigation work out in your favor.

A good credit score should be at least 700 and above so you can avail loans at a low interest rate. You may have done well this year but things could change over the next 12 months so if you want it to stay that way, monitor where money is going because when it comes to overspending, there is no one to blame except yourself!! Overspending sometimes is impulsive and causes un-due stress, but is can be resolved.

The key is a plan with a goal and YOU have to make a commitment to YOURSELF!

Have a gr8t evening!

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Family Financial Planning Part 7

The weekend is here! YEAH! I hope you have enjoyed this series on family budget planning. So, in this post let's take a look at some guidelines that will help identify estimates in on-going expenses that sometimes get overlooked in building a family budget. Guidelines that will help you are and could be used as an exercise to get you started:

 Monthly bills that stay the same – car and rental payments

 Monthly bills that change – utilities, phones and more. Find costs per month for say six months, add them up. Take this number you have calculated and divide it by six (the amount of months) to get your average cost. This is the number you will be using for your budgetary exercise.

 Bills that come every three or six months – the number for every month will be used in your budgetary process.

 Bills that come annually, meaning once a year – divide the amount by 12 months. The answer is your monthly budget number.

 Bills that come more than once a month – food, gas, lunch and family fun. This is a category to watch very closely, as it is a contributor to this “bottomless pit”, we sometimes feel and see our cash disappear into.

 Unexpected expenditures or surprise bills – what you can afford to set aside as a buffer or emergency, contingency fund - (look at the last three years or so and see what kind of unexpected expenses you and your family faced). Use an estimate that makes sense to you and divide the annual number by twelve months to get your monthly number.

 Finding out if monthly expenses match monthly take-home pay

Compare your total expenses with your take-home pay. A couple of results and areas could be staring you in the face and causing out of control spending:

Positive outcome: Income could be more than your expenses – you can either spend or save the difference!

Negative outcome: Expenses are more than your income – spending more than you have, you might have to cut costs and try to save some money to cover the bases that are not in line with your immediate goals!

Whichever of these outcomes you are faced with, knowing is better than not knowing. Staying blind to your spending challenges will keep you and your family broke and unable to plan for a better future. For some you, getting a grip now might bring little comfort and relief, but people in general want to know they can make it and find this exercise useful to make their lives more enjoyable, less stressed and able to have fun. Building a budget makes us accountable and wanting to act, faster and that sense of urgency and momentum is just what the family budget process needs to be! Take this and run with it! Your life will be better, I promise! :)

Enjoy your weekend!

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Family Financial Planning Part 6

Happy Friday! Well, we've made it through the week! Budget planning isn't so bad after all. My phone was ringing off the hook this week, with questions about, how to manage family spending when renting from a absent landlord and the residence needs some kind of attention; or my landlord isn't paying the mortgage and the home is now in foreclosure. So much happens with money in families and single people.

People are struggling to make it and dealing with spending is tough.

Tomorrow we will spend some time on additional solutions.

Have a great day.

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Family Financial Planning Part 5

Hi Everyone! Happy Thursday. Well, we are continuing our develop of understanding, learning and identifying a budget plan for families. In our last few posts we are honing in on what steps were needed to identify the take-home pay and the obligations that typically knock out any kind of spending without some parameters. Next let's look it the things and/or items that are often "Necessities". Let's start a list like this,:
headings like: food, groceries, gas, yard maintenance, security, pest control, utilities: gas, water, electric, garbage, sewer; school lunches, household supplies, car maintenance, monthly parking, housekeeper, household repairs, internet service, dry cleaning, cable TV and more.

These are things that for some people are ALL considered necessities. In my home, monthly parking isn't an issue, but someone commuting every day it is.

Try lining these items up, and placing a cost identifier. How much? Is it REALLY needed and then, start subtracting from that take-home pay.

This is an exercise that will truly allow you and your entire family see what is happening with money. Sometimes, we get fixated on habits, a time of day we do things, and they often are costly.

I am glad this series is helpful to people. I am getting good feedback.

Have a wonderful Thursday!

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